The Good Soldier: A Tale of Passion is a novel about the nine-year association between two married couples. John Dowell is married to Florence; Captain Edward Ashburnham is married to Leonora; Florence and Edward are having an affair, with Leonora's knowledge. John does not find out about this affair until his wife's death. John narrates what he considers "the saddest story" he has ever heard to an imagined companion, as if he were telling the story by the fire one night. The Good Soldier, thus, is a novel in which events are not presented chronologically, in which there is much speculation about character motivation, and in which John—the narrator—tries to understand his life and relationships.

The events of the novel unfold somewhat in reverse order. The young American, Florence Hurlbird, accompanies her uncle and his young male companion, Jimmy, on a world tour. While in England, Florence and Jimmy begin a sexual relationship. While they are staying at the Bagshawe house, Florence is spotted leaving Jimmy's room at five in the morning. Back in America, John Dowell, a wealthy man with no occupation or hobbies, courts her. Florence and John elope. They travel by sea to Europe, and a storm weakens Florence's heart. Doctors state that another sea voyage will kill her. Florence and John Dowell end up permanently residing in Europe. For two months every year, Florence visits a health spa in Nauheim, Germany for medical treatment. They meet and become friends with another married couple, the Ashburnhams.

Captain Edward Ashburnham and his wife, Leonora, have an arranged marriage. Leonora is the guardian of her old friend's daughter, Nancy Rufford. Once on a train, Edward kisses a girl he does not know and ends up in court. Afterward, Leonora urges Edward to go to Monte Carlo to relax. There, he incurs enormous debt by gambling and by paying a courtesan to spend time with him. To economize, the Ashburnhams move to India. Edward becomes involved with Mrs Basil, and then has an affair with young Maisie Maidan. Leonora attempts an affair of her own, but withdraws at the last minute.

Maisie Maidan has a damaged heart. Edward, too, has a weak heart. In 1904, Maisie, Edward, and Leonora travel together to the spa at Nauheim. One day, Edward disappears for a few hours, and Leonora sees Maisie exiting Edward's room. Leonora loses control and boxes Maisie's ears in the hallway. Her bracelet becomes tangled in Maisie's hair. Florence Dowell comes to their assistance. Florence deduces that the Ashburnham marriage is not a success and begins to pursue Edward in front of Maisie. Maisie decides to return to her husband but dies from heart failure while packing.

One afternoon, Florence disparages Irish Catholics and touches Edward's wrist. Leonora runs away; John follows her. John thinks that Leonora is upset about Florence's offensive remarks about Irish Catholics. Leonora is shocked that John does not guess that Florence and Edward are beginning an affair but says nothing.

Nine years pass. The Dowells and Ashburnhams visit the spa at Nauheim yearly so Florence and Edward can receive treatment. Leonora suspects that Edward desires Nancy. One night, Edward accompanies Nancy to a concert. Leonora asks Florence to follow them. While John is talking to a man named Bagshawe, they see Florence running past the window. Florence sees them and keeps running. Bagshawe tells John that the last time he saw Florence was in his home when she was exiting Jimmy's bedroom at five in the morning. Florence is found dead in her bedroom with an empty vial in her hand. Immediately after Florence dies, John remarks to Leonora that he is now free to marry Nancy, then returns to America to manage Florence's estate.

Edward is disgusted by his feelings for a girl he has raised as a daughter. He holds himself aloof from her. The forced distance puts a strain on the entire household. Nancy reads a newspaper account of the divorce of a married couple she knows. It is Nancy's first realization that marriages can be dissolved. After a night of drinking alone, Nancy realizes that she is in love with Edward. Leonora and Edward separately send telegrams to John Dowell in America, asking him for help. John travels with the expectation that he will marry Nancy. Edward's health starts to decline. He spends a large sum on behalf of a woman accused of murder. Leonora threatens to take away his access to the bank account again.

Edwards orders Nancy to go live with her father in India. Leonora is outraged at the idea. Coincidentally, Nancy receives a letter from her estranged mother, who is in Scotland and demands that Nancy come rescue her. Edward finds someone to take care of Nancy's mother and plans are fixed for Nancy to travel to India. Before she departs, Leonora tells Nancy that Edward is dying of love for her, and that she should accept him. Leonora also tells Nancy about Edward's sordid history. John arrives in England and is puzzled that no one seems to be thinking about his proposal to Nancy. Leonora tells John that Florence and Edward had an affair. When Nancy leaves, John accompanies Edward and Nancy to the train station, where they part coldly and formally.

John is with Edward when he receives a telegram from Nancy, in which she says that she is having a "rattling good time." Edward removes a penknife from his pocket, tells John that he needs rest, and says goodbye. John leaves. Edward slits his own throat. A month later, Leonora offhandedly informs John that Florence and Edward had been conducting an affair.

When Nancy hears of Edward's death, she enters a catatonic state. The only words she utters henceforth are Latin for "I believe in an omnipotent God." Leonora remarries and becomes pregnant. John brings Nancy home to England and takes care of her.